Helping You Avoid Life's Financial Mistakes

Why Taking A Long View To Success Is Better Than Get Rich Quick

December 29, 2008 By Leave a Comment

In the last post I talked a lot about paying the price up front with short pain so you can enjoy the long term benefits.  Today’s post is about why taking a long term approach is better than the get rich quick ways out there.

Why Society Pushes Get Rich Quick

Today you can go about any where on the Internet without seeing some sort of get rich quick opportunity.  I see dozens of them every day.  Sites saying make $10,000 next week, or earn your first million in the next 3 months, or we will wipe away 90% of your debt.  These ideas sound great but do they work?

If you have ever joined one of these business opportunities and have actually been successful with this let me know and leave a comment below because if you are it would be a rare coincidence. 

Get rich quick is termed this way to make it sound so easy anyone could do it.  In fact they make it sound so easy but it’s just the marketing technique used to lure you in.  Many of these types of so called business ideas are pushed on those that are looking for that quick fix to becoming successful.  Which may even set you further back if you actually fell into one of these traps

They make it seem as if you can put zero effort in and get a 100% return, but in reality it doesn’t work this way.  They make it seem as if the grass is greener on their side of the fence, but the truth is if it really worked wouldn’t everyone do this?

I knew an individual once who invested thousands into one of these zero effort businesses thinking he was going to make some big money.  In the end it was a scam and he lost all of his money. 

Why Having A Long Term Vision Is Better.

The truth is Rome wasn’t built in a day.  You talk to any business owner and they will tell you that their business took time to achieve their level of success. 

A great example is a great mentor of mine Yaro Starak.  He runs a blog called Entrepreneurs-Journey.  He started his blog with a humble beginning.  He didn’t have much but over several years worked hard to build his blog and today he is very successful with a high 5 figure monthly income.

Becoming successful is a process.  Whether it’s getting debt free, building up you emergency fund, or starting your first part time business it’s going to take a lot of time to achieve. 

Though most who strive for success will fail.  In fact based on the simple principle of the 80/20 rule at least 80% of people will fail and on 20% will succeed.  When I was in Financial Services we would hire new recruits in constantly and only 2 out of 10 ever stuck around to get licensed.  We knew  that 8 out of the 10 would enter the witness protection program never to be seen or heard from again.

3 Tips To Stay Out Of Get Rich Quick

  1. If it sounds to good to be true it probably is.
  2. Stay away from get rich quick or schemes like this.
  3. Becoming successful requires 2 things, effort and time.

Have you built a business and achieved success?  Have you ever be caught up in a get rich quick scheme?  Share your story in the comments below.  Getting caught up in one of these big stumbling blocks can set you back, so share your story to help others for making the same mistake.

Filed Under: Financial Independence Tagged With: , , , ,

How Pain And Pleasure Effects You Getting Debt Free

December 26, 2008 By 5 Comments

In life their are two things that control what we do for any reason.  The first is PAIN, the things we don’t want to do and the second is PLEASURE the things we do want to do. 

Recently I was reading a great book about this subject by Anthony Robbins, “Awaken the Giant Within.”  He talks in greater length about this in his book but that entire section made me realize how much pain and pleasure have everything to do with getting you out of debt or being in debt for the rest of your life.

Today’s post is about facing your pain of being in debt to achieve pleasure by becoming debt free.

How Pain And Pleasure Control You And Your Debt

Pain and Pleasure all happen because of one reason, a decision, and that decision either leads you down a road of pleasure or pain.  However here is the problem.

We as human beings are geared towards pleasure.  Everything we do is to stay away from pain.  However is it always the right way to do things?

Although, we are looking for the easy way out especially when it comes to getting out of debt and in the short term things may look good but in the long term we may face some even bigger challenges.  Getting debt free is all about associating pain and pleasure the right way. 

Here’s a simple example about what I mean.

Lets say you don’t like to brush you teeth because in the morning your to tired or at night before you go to bed you just want to go to bed.  Now in the short term you have gained pleasure because your to tired to brush your teeth but in the long term you may cause some even bigger challenges for yourself by not brushing say tooth decay, a root canal, or worse dentures. 

So just cause you take the short term pleasure doesn’t mean their will be some long term consequences.  Now let me give you an example of how this might happen if your trying to get out of debt.

Lets say you want to put a debt plan together so you can finally get on the right track, but this month you have some unplanned bills coming through and you decide to wait until next month.  You literally talk yourself out of it for that month and decide I’ll do it later and then another month goes by and another month till finally you have so much debt that you have to get into a debt counseling program, or a debt negotiation program, or worse file for bankruptcy.

Again you pushed off getting a debt plan together something you could have done on your own and now you need to take more drastic measures.  All because you decided in favor of the short term reward and not the long term pleasure. 

Does this sound like you? 

How To Use Pain And Pleasure To Get Debt Free.

The simplest way to get debt free is changing the way you associate pain and pleasure.  For example if associate just trying to forget about your debt problems that mean you are associating pleasure for not setting up your debt plan.

However if you would associate thoughts of, ”if I don’t setup my own debt plan now I will have to go into a debt negotiation plan or worse bankruptcy,” you would associate pain with not setting up the debt plan and do it immediately.  Then every time you think it’s a pain to get out of debt you can think of the long term pain it would cause you.

Though this may come at a great cost to you.  Sometimes before most people take action is when it’s to late.  It’s finally come to the point that you must do something or their will be a big price to pay, say foreclosure or bankruptcy.  The pain has dramatically increased and now you need to do something or else. The pleasure of putting it off is not their anymore.  This is when most people decide to act however you don’t have to wait till it comes to this. 

So you might be asking how get started? 

Their are plenty of ways to do so but finding an inspiring and moving way would be the best.  For example if you know someone or people who’s in bankruptcy or even better homeless visit them and think about how life would be if you didn’t get your act together.  Seeing someone going though this kind of pain can have a huge effect.

I once heard of a guy who didn’t want his kids to do drugs and wanted them to learn why they shouldn’t take drugs and the effects they can have on you.  So he knew of a place where they rehabilitated drug attics and decided take his kids on a tour of the place.  The sites were unspeakable.  Though terrible it worked.  The children’s fear was permanently ingrained in their thoughts and every time someone tried to offer them drugs the images of those people going through rehabilitation came to mind.

The mind is a powerful force.  In the end setting up a debt plan may cause you to endure a little pain but it’s minimal to the pain you could potentially face down the road by just giving up a little pleasure now. 

Want to save yourself form financial pain sign up for my RSS and get back on track today.

This post was featured in the Money Hacks Carnival by Cash Money Life.

Filed Under: Debt Managment Tagged With: , , , , , , , , ,

Financial Money Traps: The Option Arm Mortgage Disaster

December 22, 2008 By 1 Comment

Today is the financial post in the Financial Money Trap Series of money traps I’ve personal fallen into and originally this was only to be a 2 post series but I felt this last post had to be said.  In the first post I talked about a timeshare trap I fell into, and the second post talks about the credit card traps I’ve fallen into.

Today’s post is about a mortgage trap I fell into.  This trap could have been much worse but I will explain what I did to prevent them from getting any worse than it really was.

The Option Arm Mortgage Trap And How It Works

Of all the different types of mortgages out there you defiantly need to watch out for this one.  Now I’m not saying this is a bad mortgage.  What I am saying is that this is a mortgage for only the most sophisticated people who are can take bigger risk and fully understand how this mortgage works.

The Option Arm Mortgage is unlike any other mortgage out there.  All mortgages have a single payment and an interest rate.  Sounds pretty simple but a Option Arm has an option of 4 different payments you can make on it.

  • The first two payments are the 15 year payment, and a 30 year payment.  Both of which are like paying on a 15 and 30 year loan except the interest rates are variable and can adjust on a monthly basis. 
  • The third payment option is an interest only payment.  On this payment you are only paying the interest and no principle on the actual mortgage.  This payment can adjust monthly as well.
  • The fourth payment is called a minimum payment.  This payment will actually be less than the interest payment.  Though this payment does not usually adjust monthly.  It usually can only adjust around 7.5% per year of the payment not the interest rate .  So if you have a $500 minimum payment the next year the highest the loan could adjust to is $537.50. 

How This Mortgage Was Designed To Work

When I first got the option arm mortgage I learned their was two different ways to use this loan. 

  1. The way lenders prefer you to use this loan is for you to pay either the 30 year or 15 year payment like you normally would but if thing would happen to get tight and couldn’t make those two payments you could pay the interest only payment or if things were very tight you could make the minimum payment. 
  2. The second way to use the option arm loan is to pay either the interest only payment or the minimum payment and save the difference you would be paying on your 30 year or 15 year payment aside into a separate savings account.  Why do this?  So you have easy liquidity on your money just in case you lost your job or had a dire emergency.  Then after saving the extra cash and gaining a little interest on it after 30 years you can take that cash you have saved and pay off the mortgage in full.

The Problem With The Option Arm Mortgage

Sometimes things sound great in theory but in reality they just don’t work.  In the case with the option arm mortgage it couldn’t be more true.  Here’s the problems with this mortgage.

  • You could pay the 30 year or 15 year payment option and only pay the minimum or interest only when you needed to but the issue I’ve seen here is that people will get stuck on paying the interest only or worse the minimum payment and eventually dig a hole so deep that they can’t even pay the 30 or 15 year payment. 
  • In the second way to pay off the mortgage you have to set up a savings account to set the money aside so you can keep your fingers off of it.  However, the problem is that the mortgage lender only does mortgages.  So this pretty much leaves you to figure out where to save the money but 9 times out of 10 you may spend all of the money before you save it.
  • And last but not least the biggest problem is that the minimum payment on the option arm loan is a negative amortization payment.  What this means is that you are paying less than the interest due and therefore add the difference between the interest only and minimum payment to your loan balance.  Yes you heard me right your loan balance will go up.  After 4 years of having this loan I ended up adding $4000 to my loan balance.  What a shock this was.

Have You Been In This Mortgage Trap?

Again this mortgage is not for everyone but more important knowing all the risk involved.  Have you ever been in this type of mortgage before?   Leave a comment and let me know how it worked out for you.

This post was featured on the Carnival of Personal Finance by The Fraud Files Blog.

Filed Under: Mortgages & Loans Tagged With: , , , , , ,

Financial Money Traps: How Your Credit Cards Can Get The Best Of You And How To Fix It

December 19, 2008 By 3 Comments

Earlier in the week we started an article series called financial money traps and in the first article we talked about timeshares and different ways they can trap you. Then next week we will finish the series with the final post on Monday.

Today post is about helping you get past some of the credit card traps out there and also to give you some tips to help you save more money and avoid getting ripped off.

My First Credit Card Nightmare

I’m sure almost all of use can speak from experience about how credit cards can bring us happiness and joy but also bring us to are knees at a moments notice.  My worst experience with credit cards came true several months back as I opened the statement and proceed to read down the list of transactions.

Everything looked good until I got to the bottom of the statement.  Their was a payment for $90 to an internet marketing company.  I looked at the name of the company and reliezed who it was.  It was an internet marketing company I had bought a book and a few DVDs from and somehow they were charging me $90 for some sort of membership site fee.

What I failed to realize was that I had been paying for this membership site for several months without even knowing it.  What a nightmare.

After calming down I dug through the fine print and realized they had given me a free month subscription to there membership site and after the first month they were going to bill me $90 every month after that.

The only good news out of this story was that after I had called the company and explained my story to them they at least refunded me the last months $90.

Why Credit Cards Take Money From You?

From that point on I learned my lesson and paid very close attention to every payment being made on my credit cards.

Or did I?

The second story is similar to the last one.  I bought an ebook on the internet about affiliate marketing.  However I clearly read the fine print this time.  This particular website had an ecourse which again gave me a free months access to.

So I decide to take them up on the 1 month subscription and take there ecourse.  However at the end of the month I went to cancel myself out of the program and realized it was next to impossible to get out of the program.

After nearly 2 months after being in there program I finally was able to get out of the program.  However to cancel I had to dig through their forum to find their phone number and then call them to cancel the subscription.  This took more time than I realized.

So why do credit cards take money from you?  Because they don’t know any better.  I could blame the credit card company or the subscription program I got involved with but it in the end it was nobodies fault but my own because I signed up for the program and it was my responsibility to cancel it.

Credit Cards May Even Try To Steal From You.

This last story happened to me not to long ago.  Again I was skimming though my credit card statements and seen a payment for $30 for a payment protector program.  I had no idea what this was for and at the least did not remember signing up for this program.

So I called the company and canceled the program but in the entire conversation with the company no one could tell me how I got into their program.  Again this shows why it is so important to read you statements.

In the end though following a few simple tips can save you some big money when it comes to your credit cards and as in my case it saved me $150 a month or $1800 a year.

  1. Review all of your credit card statement thoroughly. I can’t say this one enough.  Know who is getting your money and stop those who you don’t want to pay.
  2. Read the fine print. This is a big deal with credit card companies but also make sure you check the fine print other things you buy like internet subscription programs and membership websites.  You may sign up for something that’s not easy to get out of.
  3. Be careful who you give access to. Giving access to the wrong people can cost you big and if you do give access to a company to bill you monthly make sure you monitor them and that they debit your card for the correct amount.

Have you ever been though a credit card nightmare?  Do you have some tips to help those from falling victim to credit card abuse?  Leave a comment below and let everyone know.

This post was featured in The Carnival Of Money Stories Edition #90: The Holiday Edition

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Join In The Christmas Cheer Carnival #183 Is Here

December 16, 2008 By Leave a Comment

Christmas is just around the corner and before you know it it will be here.  Along with that Christmas cheer their is nothing like a little personal finance to help sooth the aches and pains of the holiday spending by learning how to save more on your budget and gain some insight into better spending.

This weeks Carnival of Personal Finance was brought to you by The Frugal Duchess Carnival 183.  This week we have the Pre-Holiday Sales Addition.  You can check them out at the link above.  Also below are a few of my favorites.

Enjoy!

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Financial Money Traps: Why Timeshares Are A Trap And How To Get Out Of Them

December 15, 2008 By 23 Comments


Are you trying to sell your timeshare?  If you have fallen into this money trap you will want to read this post.  If you are interested in buying a timeshare and want to know all the pitfalls and money traps you will want to read this post as well.

Today’s post is all about financial money traps and in particular my personal biggest money trap that I’ve recently been through, timeshares and how to get out of them.  Then in the next post I’m going to talk about some of the smaller money traps I’ve faced and how to avoid them.

I was going to do just one article on all the money traps I’ve fallen into but felt this particular subject on timeshare needed it’s own space.

Why Are Timeshares Are A Bad Buy

With all the money I’ve invested into my timeshare and the little return I got back from it this has been my biggest stumbling block ever.  Personally though I am the only one to blame for the situation I am in.  I made the decision to buy it and as a result of poor education on the subject I paid the price, almost $7000.

Believe me though when I tell you sales reps for timeshares will literally tell you anything to get you to buy a timeshare.  In fact when I bought mine they took me out to lunch for a free meal and even gave a free trip to the virgin islands just for taking a look.  This may be the only good thing about the whole process.  However they’re a few things that you need to realize.

  • Timeshares aren’t an investment. When I bought my timeshare are sales rep informed us that it will grow in value as time goes on and you can sell it for more.  This is totally false.  Timeshares do not grow in value.  They are no more than just a time slot which you own at a resort not the actual real estate itself.
  • Timeshares are very hard to sell. If you wanted to sell your house you could put a for sale sign in the front yard but with a timeshare in say ARUBA, how would you sell it?
  • Timeshare loans have high interest rates. If you aren’t buying your timeshare straight up then you will have to take a loan on it.  My timeshare had a 16% interest rate on it.  You can bet I paid it off quickly.
  • Timeshare exchanges are expensive. To exchange your timeshare to another resort destination say Hawaii you will have to pay what is known as an exchange fee for around $100 to go to a different resort.
  • You have to pay for the maintenance at your timeshare. This can be costly when owning a timeshare.  Even when you have the timeshare paid completely off you still have to deal with maintenance fees.  Mine was over $600 every two years and that’s not all.  They usually increase it by 10% a year.
  • You have to pay for timeshare membership fees. Finally, once you do have a timeshare you have to pay membership fees to a timeshare network in order to use your timeshare or exchange it to go some place else.  These fees can usually range for about a few hundred dollars just to be a member.

As you can see even if you do buy a timeshare and own it free and clear it will still cost you.  Now am I saying all timeshares are bad.  No, I’m saying that timeshares have a lot of pitfalls that someone with no education on the subject can fall into a bad money trap like I did.  So how do you go about getting out of this money trap?

4 Ways To Sell Your Timeshare

When you are going about trying to sell your timeshare there are good ways to do it and some terrible and expensive pitfalls to watch out for.  Below are 4 ways to sell a timeshare, and only 3 of the 4 are recommended ways to do so.

  1. Listing Services. I don’t recommend this option.  A timeshare listing service is usually an online service where you pay them an up front fee of usually around $600 to list your timeshare with them.  Trust me when I tell you these services don’t work.  I have spent nearly $1200 with these services thinking they would send me some prospective buyers and I got zero offers form both companies I listed with.  Though if you or someone you know has had luck with these services let me know and leave a comment below.
  2. Timeshare broker. I’m not sure if this is a viable option but this would be like hiring a real estate agent to sell your property for you.  The reason why this would be better than going through a listing service is because the broker only gets paid unless they sell the property but do know that the broker will get paid a portion of the money you make when you sell the timeshare.  If you have more information about this option leave a comment below and let us know.
  3. Sell it yourself. With websites like eBay out there selling your timeshare, this may be a great option if you would like to do it yourself.  Though you should know you may or may not get the price you want out of it and if you do sell it yourself your timeshare could force you to pay a title transfer fee around $150 or more and the next years maintenance fees.
  4. The Buyback option. If you can’t find a buyer and just want to cut your ties with the timeshare call your timeshare and see if they have a buy back option.  Though you should know that you will only get about 10 cents on the dollar back out of it but at least it will be out of your hands.  The timeshare may also make you pay the next years maintenance fees as well.

Did the above information help?  I hope it did.  I know how much pain this has caused me and hope I can inform others so they don’t fall into this terrible trap.

Do you have a timeshare?  Are you considering buying one?  If you are leave a comment tell me about your situation.  Is it a money trap or do you like it?

Freatured in The Carnival Of Personal Finance #184: From The Land Down Under

If you like this post also read this post on Timeshare Resale Scams.

Filed Under: Timeshares Tagged With: , , ,

10 Essential Money Habits You Should Live By

December 11, 2008 By 1 Comment

On Monday I talked about 10 bad money habits you should ditch immediately.  Today I’m going to do the opposite.  I’m going to give the 10 money tips you should live by.  Though you should know that some of these things you may already be doing this post is mostly meant to be a list to get you motivated toward building better money habits.

  1. Pay yourself first.  This is such a simple tip but I had to include it.  I hear a lot of people say this but are they doing it?  Setting money aside before you pay your bills is important.  What if that next big issue comes up and you need money now?  Also don’t just set some aside for an emergency fund, set some aside for retirement as well. 
  2. Know where your money is going.  Knowing where your money is lets you know where those little leaks in your budget are and makes plugging them a lot easier.  If you have more month than money this is the first place to start, and this may also make you realize how much money you are  spending on stuff I really didn’t need.
  3. Pay off your credit cards every month.  Keeping your credit cards paid off every month does two things for you.  First, it will boost your credit score by showing financial institutions that you can handle money and two, it’s a lot easier when you don’t have to make minimum payments every month.
  4. Pay off your bad debt first.  Bad debt is the debt that doesn’t benefit you in any way.  For example a bad debt would be credit cards.  They have high interest rates and no benefits to holding the debt.  A good debt would be your mortgage.  Though still being a debt it has special advantages.  They have lower interest rates and interest is usually tax deductible giving you more money back at tax time.  Though you may want to talk to your CPA for more info on this.
  5. Have money set aside for emergencies.  I covered this a little in tip 1 but I thought it should also be said that you need to have a fund for those times that you need that extra cash.  Having an emergency fund helps in many ways but most of all it will help you sleep better at night knowing that you aren’t living paycheck to paycheck.
  6. Contribute to your retirement plan at work.  If you have a full time job that has a 401k or some type of retirement plan this is one of the simplest ways to save.  Money coming from your paycheck untouched allows you contribute to your retirement before it gets to your hands.  With an out of site out of mine philosophy you will be surprised how the money can add up in a few short years.
  7. Constantly looking for ways to cut cost.  I like to do this a lot.  Many times I will look at things I can cut cost on such as Internet, cable TV, telephone and many other things.  I’ve found ways to save money on all of these and more and you can too.  I will also requote my car insurance and property insurance, and look into refinance options to see if I can save money on my mortgage.
  8. Understanding your needs and wants.  There is always a fine line between what you want and need.  Though this really comes down to your habits.  If it’s hard for you to go to Walmart and walk out of there without picking up something you didn’t intend to buy there you bought based on wants.  If this is tough for you look for support such as your spouse when going to these places and stick to the budget.
  9. Start saving for retirement early.  This tip won’t apply to everyone but if you are a bit younger or know people who are younger this tip applies to you.  Saving for retirement early has two advantages.  First, it’s much cheaper to fund retirement because you have more time to do it.  Second, you also get the compound effect out of you money by doing this.  Read this post to learn more about that.
  10. Review your credit card statements.  Reviewing your credit card statements can save you big bucks.  I recently was skimming though one of my recent statement and seen I was making a $30 payment to a payment protector program I didn’t even agree to sign up for.  Canceling that one program saved me $360 a year.  It’s also a good habit to check over other statements you get like your phone bill, insurance bills, cable bills, and whatever else you might have.

Are there any other good money habits you live by?  These are a few that I live by, yours might be different but leave comment below and share your stories.

Filed Under: Money Managment Tagged With: , , , , , , ,

10 Bad Money Habits You Should Ditch Immediately

December 8, 2008 By 3 Comments


This week starts a article series on money habits.  I recently wrote a post on how your financial education has a lot to do with making and saving money.  In this two part series I will be showing some of the bad and good habits to ditch or live by.

Today’s post is about 10 money habits that you may or may not have and how to fix them.

  1. Don’t use your credit cards as an emergency fund.  I believe this has always been a misunderstood use of credit cards.  The reason being it’s to easy to have access to.  Instead setup an account on a monthly draft payment.  This way it’s out of site and out of mind.  Here is a great post to check out where to set up your emergency fund at.

  2. Missing payments on your bills and debts.  This is literally the kiss of death when it comes to keeping a good credit standing.  Missing payments shows distrust to financial lending institutions, bank, or any other places that may look at your credit score.  Instead pay off debts that have to be paid first before you spend on extra things.
  3. Pay more than the minimum payment on your credit cards.  When your balance is high on your credit cards it’s easy to just pay the minimum so you can get by.  The reason you shouldn’t pay the minimum is because it will take a lot of time and interest to pay off those credit cards.  In fact if you are constantly adding to them the likelihood of you paying them off in never.  Instead put a debt plan together and get out of debt the right way.  Check this post out to learn how.
  4. Bouncing checks.  This is a good way to upset a lot of people including your bank.  If you can’t afford to pay someone don’t write a bad check and let them find out when it bounces.  Instead talk to them and be up front and let them know you can’t pay them and that you will work with them so they get paid.  It’s not worth destroying a relationship and your credit over a check.
  5. Pulling money out of your retirement accounts.  Pulling money out of your retirement accounts to pay off debts or worse buy something you really don’t need can have a huge effect on your financial future.  Instead leave it where it is and read this post on how it could effect your money if you took it out to early.
  6. Buying things on impulse.  This can happen real easy.   Someone you know tells you to buy something that has worked great for them and tell you to by it right now or you have the sales man at a local retail store who is telling you to buy now or you won’t get it at are new lower price.  Instead take time to think it through.  Research the product and decide if you really need it.  Here is a great post about impulse buying.
  7. Buying what you can’t afford.  Today people are buying bigger houses, bigger cars, and some are just trying to out do the other person.  This is more commonly known as Keeping up with the Jones.  Instead of buying the best stuff focus on buying the stuff you need and for the best value.  In the end you will have something that everyone else doesn’t, MONEY!
  8. Keeping money to accessible.  Having ways to access money for those just in case moments is one thing but having money easily accessible for those anytime moments is not O.K.  Instead of using debit and credit cards for those times keep yourself a spending cash budget.  For me I keep $50 a week back for spending cash.  Set a specific amount back every week and spend wisely.
  9. Not looking at statements and bills.  This one I’m sad to say I’ve even fallen prey to.  You could be spending money you don’t even realize.  Instead review all bills and statements to make sure you aren’t paying for thing you don’t want.  Since I’ve been doing this I’ve saved myself around $160 a month. 
  10. Buying things you don’t need.  I saved this one for last because almost all of us do this.  I know there are things that I would like to have but just don’t need.  Instead place value between wants and needs buying only what you need to save money.  Now you might be saying, what if I want to splurge just this once?  Every once in a while is fine, all the time is not. 

Know any other bad spending habits?

These are the bad spending habits I’ve dealt with in the past.  Do you know of any others?  Take time now and share them with everyone and leave a comment below.

Filed Under: Money Managment Tagged With: , , , , , , ,

Does Your Financial Education Got You Stripped Bare?

December 4, 2008 By 3 Comments

Does your financial education giving you an abundance of wealth or has it left you without a shirt on your back?  In a time when the economy is in a real slump and your finances are at their worst you may be asking yourself what should I do now?

Two words, Educate Yourself!

If you are suffering from financial mistakes wether it be foreclosure, bankruptcy, or even missing a couple of credit card bills there is really only two reason you got into that situation. 

  1. You don’t know anything about personal finance or
  2. You are surviving on false personal finance education.

So in this post I’m going to go through where I get my personal finance education from and where I don’t.  I will point out a few of my own mistakes.  You may have some personal mistakes you’ve made over the years as well because of a poor financial education so if would like to share them please do so in the comments section.

Where Most People Get There Financial Education From?

Besides going to school or college where do you learn personal finance from?  Before I got into financial services I didn’t know anything about money.  I saved all my retirement money in a Cd at the bank,  before I bought my first house I didn’t know anything about mortgages, and I didn’t know anything about investments. 

You could say I didn’t have much of a financial education.  So where did I get my financial education from?  I got my financial education from two places like most people do.

  1. From My Peers.  I got advice from people at work, my friends, and or course my parents.  I got everything from sour tips to a forced depressionary thinking.  However we tend to take this advice seriously because it comes from people we know and trust so if must be true, right?
  2. The News.  The thing about the media is that although they do tell the truth they always seem to give you the negative side of the story.  Again we tend to take this advice seriously because of where it came from.  You can read more about it in this article.

Though for most people this is there only real form of education.  It was mine up until just over five years ago.  If this is were you get your education from and your personal financial situation is in shambles this may be why.

How To Identify Good Sources Of Information

Just getting your financial education from the right places can make all the difference from either going deep into debt or having cash to burn.  In order to decide where the right places to learn more about personal finance you need look at the source first and ask yourself these questions.

  • Who or Where are you getting this information from? 
  • Is this person a creditable source? 
  • What does this person know about personal finance?

If the source is your Uncle Eddie who just went through foreclosure and told you that the bank was the best place to save all your money would you take him seriously? 

I hope not.

Where I Get My Financial Education From?

So if getting your financial education from Uncle Eddie isn’t a good place what is?  Well here a few of my favorite places.

  • Good Books.  Books have a wealth of information you can learn.  In fact the great thing about books are that you can learn from other peoples mistakes and avoid them all together.
  • Financial Advisor.  Your financial advisor has a ton of knowledge on the subject.  So when you have a financial question don’t hesitate to ask.  If you don’t have a financial advisor read this article.
  • Blogs And The Internet.  I’ve learned a lot of stuff from different places around the net.  From blogs to financial websites to forums.  However be careful where you are getting your information from.  Make sure you research your sources.  Here are a few blogs I recommend and don’t forget to sign up for my RSS as well for great infromation.

Where Do You Get Your Financial Education From?

If there is one thing I can pass along about gaining a better financial education  is to learn one new thing about  your personal finances everyday.  It may not sound like much but over time it can really add up. 

Finally, where do you get your financial education from?  Is it your Uncle Eddie or is it some place else?  Leave me a comment and let me know.

Filed Under: Money Managment Tagged With: ,

Save More Money: 10 Ways To Fill Your Emergency Fund Fast

December 1, 2008 By 9 Comments

In the previous two articles we talked about how set up your emergency fund, where to save your money at, and today I am going give you some quick tips on loading up your emergency fund fast.

Before I dive into them I do want to point out that some of these tips will be easier to do than others.  In fact you may even be doing some of these things.  I am also assuming that you have no money in your savings to put toward your emergency fund for those of you who may say they don’t have no money. This post is designed to get you thinking outside the box.

Anyways on to the tips…

  1. Sell the big toys and things around home. You may have things you don’t use around your home that could create a little cash but you may also have some big toys around home.  For example I have a couple of snowmobiles and a timeshare.  I recently just sold one snowmobile and pumped up my emergency fund with an extra $1000.  This was actually hard for me to do though because it was my wife’s wedding gift.
  2. Down grade your vehicle. Do you have a big gas guzzling of a beast for a vehicle?  Think about selling it off and buy something used for just a few thousand dollars.  This could add big money to your emergency fund.  Remember I didn’t say this would be easy.
  3. Divert money from your 401k. I’m not saying take money out of your 401k or retirement plan but divert it before it gets there for a short time to build up an emergency fund.  However there is one danger in this.  Don’t get caught up in spending this money and once you have what you need go back to putting it in your 401k again.
  4. Down grade your cable. Cutting back or even cutting off the cable can save big bucks quick.  With the average cable bill around $50 a month this would be a great way to save an extra $600 a year.
  5. Down size your home. Do you have a home bigger than you really need?  Is it hard to make the  mortgage payments?  Downsizing your home to something a bit smaller could add probably the biggest chunk to your emergency fund.  With the right buyer you could get a few thousand dollars to several thousand dollars.
  6. Cut off the cell phones. Remember the days before cell phones?  How did we communicate with others?  Even with out cell phones life will go on.  Cut off your cell phones and you’ll save big with around $80 to a $100 a month or more.   If that’s not possible consider getting a track phone and buy the minutes you want.
  7. Save your raise or Christmas Bonus. For many of you who will be getting that big Christmas bonus or raise after the first of the year consider saving it instead of spending it.  Even with a 3% cost of living raise this can add up.  Besides you won’t miss the money anyways since your not use to having it.
  8. Cut off the Internet. If you have high speed Internet you can save a bundle by cutting this luxury out of the picture.  Though some of you may not be able to do this you may want to consider cutting down to dial up.  This is where I started.  With dial up packages as low as $10 a month this could save you $30 to $40 a month easy.
  9. Cut off wasteful spending and pay for just what you need. Put a budget together and delegate where your money is going.  Look for places you could save money at such as cutting down on fast food 5 times a week.  Know where your money is going will usually show you simple places you could save money at.  In fact I recently did this and realized after paying off all of my debts and living expenses that I had an extra $150 left at the end of the week.
  10. Start a part time business. I talked about this in a recent post why you should start a part time business. A simple part time business can make you some big bucks quick.  When I started in financial services my first deal was a mortgage that made me $500.  Not bad for one deal.  In fact in some part time business can pay you residual where you’ll get paid every month as long as there a customer.

Do You Have Any Other Ideas?

I know that some of these ideas were probably a bit brutal but think of it this way would you rather have the big house or be up all night worrying about how your going make next months mortgage payment.  Would you rather have a cell phone and living paycheck to paycheck or is having a little peace of mind knowing you’ll make it though the month.  It’s all about your preferences

Finally, do you have any other ideas to save money fast for your emergency fund?  I’m sure there are a ton of other ways to do it so leave a comment let everyone know.  When we share we all grow.  To get more money saving tips check this post out.

The Post was recently released on The Carnival of personal finance #182  held by Free From Broke.

Filed Under: Saving Money Tagged With: , , , ,